Background
In August 2021, On Point Window Treatment, Inc. entered into a commercial lease with 208 Clifton Place, LLC for premises in Brooklyn. The lease, drafted in the landlord’s favor, contained two protective provisions: one requiring On Point to hold 208 Clifton Place harmless from all liability, and another placing the sole obligation to obtain insurance entirely on the tenant. In October 2023, On Point’s leased space suffered significant damage when the premises’ roof—which the lease designated as the landlord’s exclusive responsibility to maintain—collapsed.
On Point commenced this action seeking damages for injury to property and alleged that the roof collapse resulted from the landlord’s negligent maintenance. 208 Clifton Place moved under CPLR 3211(a)(1) to dismiss, arguing that the hold-harmless clause and the tenant’s insurance obligation in the lease documentary evidence barred On Point’s claims as a matter of law. The Supreme Court, Kings County (Maslow, J.) denied the motion, and the landlord appealed.
The Court’s Holding
The Second Department affirmed. The decision turns on General Obligations Law (GOL) § 5-321, which voids any lease provision that purports to exempt a lessor from liability for its own acts of negligence. The statute’s text is categorical: exculpatory clauses in residential and commercial leases that relieve a landlord of responsibility for its own negligence are void and unenforceable as against public policy.
The court rejected 208 Clifton Place’s attempt to rely on the lease’s insurance-shifting provision as a work-around. Under established Second Department precedent, a landlord may not circumvent GOL § 5-321 simply by shifting the insurance obligation to the tenant. Where a landlord and tenant allocate risk between themselves through insurance requirements—for example, by having the tenant name the landlord as an additional insured—that arrangement can be enforceable. But where, as here, the provisions operate to relieve the landlord of responsibility for its own negligence, the insurance-shifting clause itself falls within § 5-321’s prohibition. The hold-harmless clause and the sole-insurance-obligation provision were therefore unenforceable, and On Point’s complaint adequately stated claims that must proceed to discovery.
Key Takeaways
- GOL § 5-321 voids lease provisions that relieve a landlord of liability for its own negligence—including hold-harmless clauses, indemnification provisions, and insurance-shifting requirements—when those provisions collectively operate to extinguish the landlord’s responsibility for its own acts.
- A tenant-only insurance obligation does not create an enforceable allocation of risk where it is paired with a hold-harmless clause that attempts to exculpate the landlord from its own negligent acts; both provisions fall together under § 5-321.
- Commercial tenants who suffer property damage from a landlord-maintained structural element (roof, foundation, exterior walls) should not be deterred from pursuing claims by exculpatory lease language—such clauses are routinely invalidated under § 5-321.
- Landlords drafting or negotiating commercial leases in New York should understand that GOL § 5-321 limits the scope of contractual exculpation they can obtain: risk-shifting through insurance is permissible, but full exculpation for the landlord’s own negligence is not.
Why It Matters
Brooklyn commercial landlords—particularly those with aging building stock—often include boilerplate hold-harmless and tenant-insurance clauses in their leases. This decision reminds both landlords and tenants that those clauses have firm limits under New York law. When a structural element within the landlord’s exclusive maintenance obligation fails, a hold-harmless clause will not protect the landlord from a negligence claim, no matter how broadly it is drafted.
For commercial tenant counsel reviewing or negotiating leases, this case reinforces that hold-harmless provisions and sole-insurance-obligation clauses in commercial leases are unenforceable to the extent they purport to shield the landlord from its own negligence—and tenants need not waive that protection. For landlords, the decision is a reminder that liability for structural maintenance obligations cannot be contractually shifted away and that adequate property insurance at the landlord level remains essential.